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John Stossel is pissing me off lately.
It's a failing of many libertarians that's got me angry too.
When they're talking about tariffs being bad they focus on how that brings the price of goods up and that protectionist policies are bad.
In short, they're promoting globalism as a good thing.
The problem is not every nation participating in the global economy is our friend; even if we're trading with them.
Tariffs on goods from a potential foe encourage domestic production and while that might make those goods more expensive, it also tends to increase the real wages of the domestic workers.
Notice how, despite so many things getting cheaper, wages have stagnated in the US?
Yes, a tariff and domestic production might mean making something at a comparative disadvantage, but being able to make something when potential foe becomes actual foe is well worth the losses.
It's a matter of national security.
But libertarians reject the, functional and proven, nation-state model while blithely forgetting that war is the killer app of the nation-state.
A nation-state should be looking to the welfare and happiness of all of its citizens and not just catering to a very small percentage who get a slightly bigger profit from offshoring jobs to the cheapest possible location.
I work in R&D for a large mfg firm. I’ve always contended that I’m willing compete with any workforce in the world on a LEVEL playing field.
ReplyDeleteDon’t make us compete with countries, especially enemies, who don’t have to comply with any environmental, safety or legal regulations.
In my mind, tariffs work to level that playing field.
That said, I also realize they’re kind of like communism. Sounds great on paper, but inevitably, folks (read: bought and paid for politicians) get carried away and we end up with a Great Depression.
A good example of globalism, in a small scale, is the US of A. A national company will raise prices across the board in order to cover the costs related to one specific area. Like national chain drug stores raising prices here in Florida to cover losses in NYFC and coastal California. Or insurance costs rising in Florida due to cars being stolen in Chicago.
ReplyDeletePoof. Globalism writ small. Now do Globalism writ large. The major reason drug costs are so high in These United States is due to we are paying for everywhere else having price controls.
If I remember correctly, the founding fathers designed the Government to operate on those very tariffs, not on taxing the people.
ReplyDeleteIt's in the Constitution, unlike a lot of their solutions.
DeleteUnlike a lot of libertarians, I make a distinction between "if this were Libertopia" and the dystopia we actually live in. There's a large part of me that would LOVE it if the US was totally autarkic---producing all we needed in-house. That way we could close our borders and tell the rest of the world to go to hell and pump thunder.
ReplyDeleteThen you're a "fucking statist" according to the folks at most libertarian sites.
DeleteOf course, they can no longer distinguish between libertarianism and anarchy.
The key is that the average profit is increased by globalism, but the devil is in the details: a few industrialists make huge profits and American workers get impoverished. If you only look at the average (GDP) then it looks OK, but the human cost is hidden.
ReplyDeleteStossel believes that tariffs hurt the consumer when the competitive field is level. The problem is that is a very rare occurrence. Many economies regulate labor cost forcing it as low as possible. Some countries violate patent law so the R&D costs are negligible. The PRC does both.
ReplyDelete